USA: Mortgage & home
Rent vs Buy Calculator
Compare renting and buying on equal terms. Buying builds equity but has closing, upkeep and selling costs; renting is flexible and lets your down payment grow in investments. Enter your rent, the home you are considering and how long you plan to stay to see which option leaves you better off.
How to use the Rent vs Buy Calculator
- Enter your current rent and expected rent increases.
- Enter the home price, down payment and mortgage rate.
- Set ownership costs, home value growth and investment return.
- Choose how many years you will stay and compare.
Formula
Example
With $2,200 rent and a $420,000 home at 6.5% with 20% down, renting is cheaper if you stay 5-9 years, and buying pulls ahead from about year 10 - selling costs and early interest eat the first years of equity.
Why time matters
In the first years, most of a mortgage payment is interest, and selling costs (about 6%) wipe out early equity. The longer you stay, the more buying tends to win.
Not just money
- Buying: stability, freedom to renovate, forced savings
- Renting: flexibility to move, no repair bills, money stays invested
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Frequently asked questions
Does this include tax benefits?
No. Since 2018 most households take the standard deduction, so mortgage interest deductions help fewer buyers.
What investment return should I use?
Many people use 5-7% for a diversified stock portfolio over long periods.
What are ownership costs?
Property tax, insurance, HOA and maintenance. 2-3% of the price per year is a common estimate.
Is this financial advice?
No. It is a planning tool; talk to a licensed advisor for advice on your situation.
Results are estimates for planning, not financial advice. Confirm important decisions with a qualified professional. Your inputs stay in your browser and are not sent to Soft2Cloud.
Last updated: November 2026